Updated 3:33 PST: With the unsolicited bid by Microsoft, and potentially other suitors (TechCrunch reports News Corp. trying to put together a bid) who want to derail the combination, Yahoo has its hands full. I expect that ultimately Microsoft will succeed in its two-year quest to bring Yahoo into its camp and more rapidly and decisively move its business from the Windows to the Live era (compete with Google).
While the Yahoo board is figuring out what's an acceptable price, distracted Yahoo employees must continue to toil away in the aftermath of a 7 percent reduction in workforce announced a few days ago and a beating by financial community, press and pundits, who were not impressed with Yahoo's recent earnings and outlook.
In this unstable atmosphere, Yahoo is getting ready to take on Google's strongest property outside of search--YouTube--with a video version of Flickr. Yahoo is talking yet, but the word is that Flickr Video is coming soon. Define soon? Hedging bets, probably in the next few months.
In March 2005 Yahoo acquired Flickr, which set the standard for photo sharing sites. But Flickr has been slow to add video, standing by while YouTube did for video what Flickr did for photos. Yahoo executives publicly mentioned adding videos to Flickr in August 2007--in the meantime YouTube has lapped the field.
YouTube hasn't added photos to its service, but that doesn't mean that Flickr Video is a non-starter. Flickr has a loyal community of millions of users, many of whom also have allegiance to YouTube, not to Yahoo's current video site, Yahoo Video, or MSN Video.
According to comScore's November stats, Google had over 30 percent share of videos viewed, compared to Yahoo's 3.5 percent and Microsoft's 1.9 percent. YouTube is uploading 10 hours of video every minute.
Similar to what transpired with Yahoo Photos, Yahoo Video (below) will morph into Flickr Video to build on the stronger Flickr brand and community.
The good news is that the Flickr team has a legacy of innovation. YouTube clearly has momentum but there is plenty of market share to be had. A compelling Flickr Video user experience that bridges the combined Yahoo and Microsoft community, or even Facebook, would be a good starting point.
Update: In an email a Yahoo spokesperson said it was "premature to share any details on video developments at the moment." On my suggestion that Yahoo Video would be replaced by Flickr, Yahoo said, "This an area we continue to invest in, and we have plans to enhance this site (video.yahoo.com) which is designed to be a hub for online video consumption of UGC, partner and media property content including entertainment and news video."
If Yahoo is going to maintain both video sharing services, perhaps Flickr will be more focused on community, social media and non-commercial content.